Headlines of the Day
TRAI not convinced that Airtel and Jio are guilty of predatory pricing
A preliminary assessment of Vodafone Idea’s (Vi’s) latest complaint claiming free, unlimited 5G being provided by Reliance Jio and Bharti Airtel shows it does not hold up to scrutiny, so far, Telecom Regulatory Authority of India (TRAI) officials said. They further said TRAI continues to investigate the legal and technical aspects of the complaint and evaluate the statements on the issue made by all parties.
Vi recently approached TRAI with a complaint that Reliance Jio and Bharti Airtel, which it called significant market players (SMP), are indulging in predatory pricing with their respective unlimited 5G offers. Vi is yet to start its own 5G rollout.
Predatory pricing is a pricing strategy used by companies to gain market share by setting prices lower than their competitors. Both Airtel and Jio have rejected Vi’s latest allegations.
TRAI officials said 5G services are not being provided free of cost. “5G services are being offered at the same rates at 4G by the two telecom service providers. This does not mean it is free. Instead, it is being offered on plans that are not entry-level,” a senior official said.
The telecom industry is stepping up its 5G play with aggressive network rollout and strategic packages. In March, Airtel announced the launch of “unlimited” data for subscribers availing of its 5G Plus services, currently live in over 500 cities. The offer is available to all postpaid customers and also to prepaid customers having a data plan of Rs 239 and above. Airtel’s postpaid plans start at Rs 399, the company’s website shows.
Reliance Jio, too, is offering unlimited 5G data as part of its ‘Jio 5G Welcome’ offer to select customers on an invitation basis. The offer is available on both prepaid and postpaid plans that cost Rs 239 or above. It has also launched a ‘5G Upgrade’ data plan for Rs 61.
Officials also said a quick 5G rollout is a priority for the country, and companies need a regulatory environment conducive to this goal.
There are 5G-related predatory pricing complaints even as TRAI awaits the Supreme Court restoring certain powers to it so that the regulator can take full action in matters of predatory pricing.
In February 2018, the telecom sector regulator issued an amended tariff order proposing a fine of Rs 50 lakh per circle for predatory pricing by telecom companies. The definition of SMP was also changed in that order.
Earlier, an operator was considered dominant if it crossed the 30 per cent threshold by number of subscribers, revenue market share, volume of traffic, and network capacity in circles. But under TRAI’s new regulation, network capacity and volume of traffic were removed as determinants.
After appeals by telcos, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in December 2018 set aside the TRAI order in relation to the modified definition of SMP and predatory pricing.
Subsequently, the telecom regulator moved the Supreme Court in early 2019 seeking the restoration of SMP and non-predation provisions contained in the telecommunication tariff order of 2018. While the apex court then allowed TRAI to collect details on segmented tariff plans offered by telecom companies, its original appeal challenging the TDSAT order remained pending.
In September 2022, TRAI filed an application before the Supreme Court, seeking an early hearing of its appeal. In that application, it pleaded that in the absence of these provisions, tariff orders have become null. “The applicant (TRAI) is not in a position to discharge its statutory function related to regulation of tariff,” it said.
Currently, its appeal against the original TDSAT order is pending before the Supreme Court. Business Standard
You must be logged in to post a comment Login